COUNTY REDUCES AMOUNT PAID OUT FOR WORKERS' COMP.

Byline: TROY ANDERSON

Staff Writer

For the second consecutive year, workers' compensation and litigation costs have dropped in Los Angeles County, where officials have cracked down on abuses and boosted wellness efforts, such as offering fitness bonuses for firefighters and lifeguards.

After paying out $408 million in fiscal 2003-04, the county had its total costs drop to $358 million in 2005-06, officials said Thursday.

Chief Administrative Officer David Janssen said county and state workers' compensation reforms and stepped-up attention contributed to the drop.

"Departments specifically identified risk managers that we can work with, focusing on return-to-work programs and working as a whole organization to continue to monitor and drive down the costs," he said.

The annual risk-management report found that workers' compensation costs dropped from $324 million in 2003-04 to $263 million last fiscal year.

The report also found that the county's total liability for workers' compensation costs dropped 35 percent in that period, to $2.4 billion.

But while the county's legal expenses fell from $49 million to $45 million in that period, settlements and judgment payments jumped from $26 million to $38 million.

Chief Deputy County Counsel Donovan Main said a $3 million sheriff's settlement, a $4.5 million medical-malpractice case and $2.3 million in legal fees in a hospital-closure case drove up the costs.

"Normally, we don't have that combination of large-magnitude cases," Main said.

Risk Manager Rocky Armfield said the $61 million drop in workers' comp costs is significant because the county has more than 95,000 employees and about 24,500 open workers' compensation claims.

The county has aggressively worked to combat fraud and abuse and has encouraged employees to come back to work to perform light duties.

The county Fire Department also has embraced a Fitness For Life program that offers firefighters, lifeguards and their nonunion management counterparts a 3 percent bonus for participating.

At the Sheriff's Department, workers' compensation costs have dropped from $100 million in 2003-04 to $84 million last fiscal year.

"We have been aggressively pursuing anything that looks like, or might be, fraud," said Chief Bill McSweeney, who oversees the Risk Management and Internal Affairs divisions.

Sheriff Lee Baca hired 10 retired detectives to conduct surveillance on employees and McSweeney said the department has reviewed more than 1,000 cases.

McSweeney said the detectives' work is sending a "big message" to employees.

"When we call somebody up and say, We have reason to believe you were playing basketball at the park last week and you told us you couldn't walk. Which one is it? -- We often get a response of, I'm feeling much better now. I'll come back to work."

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